Investor Presentation Year End Result 2013 and Outlook May 2014
2 Company overview - iproperty Group iproperty Group Limited is the leader in online advertising and other real estate services for real estate agents, developers and consumers in key Asian markets of Malaysia, Indonesia, Hong Kong and Singapore.
Company overview - ASEAN Region The region iproperty Group operates in is one of the fastest growing regions in the world, the ASEAN region: - Combined the 7th largest economy in the world (and 4th in 2050) - #3 in real GDP growth (behind China and India) with 5.1% annual growth - A diverse group of countries, Indonesia contributes 40% to the output - Great resilience during the 2008 GFC - 67 million households are in the consuming class (to double by 2025) Source: McKinsey&Company 2014 3
4 Highlights of 2013
5 Summary of full year results 2013 Total income up 35% from 2012 Full year revenue growth from continuing operations of 23% Highlighted by half on half revenue growth of 49% Full year EBITDA of $2.0m (includes one- off gain on sale of icar shares of $5m) H2/13 EBITDA profit of $0.3m from continuing operations Strong control of operating expenses of $22.0m (2012: $20.5m) Cash flow positive in H2/13 of $0.1m Strong balance sheet includes cash of $14.5m Migration of property advertising to online platforms is now accelerating
iproperty reached profitability in H2/13 AUD FY2013 FY2012 % Revenue from services 19,045,657 15,460,380 23% One- off income 4,957,609 2,181,179 127% 24,003,266 17,641,559 36% Advertising and marketing (3,569,375) (2,974,409) 20% Employment expenses (13,029,136) (11,628,584) 12% Other Opex (5,389,909) (5,929,451) (9%) Total expenses (21,988,420) (20,532,444) 7% EBITDA 2,014,846 (2,890,885) 170% Depreciation and amortisation (429,594) (298,553) 44% Net interest 281,878 395,384 (29%) Group recorded EBITDA of $2m in 2013 on back of one- off income of $5m Without the impact of the one- off income the group generated an EBITDA of $0.3m for 2H13 Income tax expense (161,137) (143,780) 12% Profit/(Loss) for the year 1,705,993 (2,937,940) 158% Note: FY2013 EBITDA normalised for one- off items: ($2.9m) FY2012 EBITDA normalised for one- off items: ($4.3m) 6
iproperty Group has a strong balance sheet for FY14 AUD FY2013 FY2012 Cash 14,518,547 11,224,249 Other current assets 3,622,559 2,912,117 Current assets 18,141,106 14,136,366 Available for sale investments - 2,000,000 PPE 583,157 610,095 Goodwill & intangibles 21,108,000 14,544,288 Non- current assets 21,691,157 19,309,200 Total assets 39,832,263 33,445,566 Billings in advance 3,747,111 2,258,272 Other current liabilities 4,398,306 2,967,931 Aided by icar sale proceeds and self sufficient operations in 2H13, cash position is up as at 31 December 2013 Strong balance sheet enables the Group to act quickly on M&A opportunities Current liabilities 8,145,417 5,226,203 Deferred consideration 561,798 - Total liabilities 8,707,215 5,226,203 Net assets 31,125,048 28,219,363 Total equity 31,125,048 28,219,363 7
8 Outlook
9 Company overview - iproperty Group More than half of iproperty Group s revenues are generated by servicing Developer clients Source: Jan- April 2014 Revenue data Developer Agents Other 37% 10% 53%
10 Country Profile (Jan- April 2014) - I The group presents itself in a strong posi]on Malaysia: Hong Kong: Profitable operagons at 50% EBITDA margin Clear market leadership and strong congnued growth Developer Revenue up 121%* (Jan- Apr14 vs. Jan- Apr13) Another net 40 new developers were added during Jan- Apr14 Agent Revenue up 49% (Jan- Apr14 vs. Jan- Apr13) Paying Agents are up 184 agents during Jan- Apr14 Lisgngs are up 17,000 or 5% during Jan- Apr14 Leads are up 75,000 or 28% Clear market leader gohome.com.hk approaching profitability Strong events business adds posigve earnings Revenues are up 11% (Jan- Apr14 vs. Jan- Apr13) Price increase planned for 1 June * Developer revenue includes online, print, video and events - growth rate is impacted by gming and number of events
11 Country Profile (Jan- April 2014) - II The group presents itself in a strong posi]on Indonesia: Investment phase to extend leadership posigon Number 1 player in key categories Strong congnued growth Agent revenues are up 34% (Jan- Apr14 vs. Jan- Apr13) Number of paying agents increased by net 1,300 agents or 17% over last 4 months Developer and Media revenues are up 15% Unique Visitors are up 37% Singapore: Group: Stable business with increasing producgvity Significantly improved earnings base Revenues are up 52% (Jan- Apr14 vs. Jan- Apr13) Operagng Expenses are flat (Jan- Apr14 vs. Jan- Apr13)
12 iproperty s asset base Asset Base as at 30 April 2014 Brand(s) People Knowledge Customer RelaGonships Consumer Database Technology Systems Leading Portals, Leading Expo/Events, Magazines, Awards 300 people across 4 main locagons Many years of market and industry knowledge 26,929 Paying Local Agents (up from 22,031 in Dec12) 979,538 Contacts (up from 733,091 in Dec12) Strong IT planorm of internal and external systems Key inigagves include: iproperty Buyers Club Planorm, irealtor ( shopify ), Mobile, Refresh of Websites
13 iproperty growth focus Going forward the group focuses on 3 key areas 1) Maintaining and extending a strong asset base for sustainable current and future revenues 2) Growing income across the exisgng business units 3) Pursuing new growth op]ons
14 iproperty s Growth Strategy ecommerce (Transactions) Bonus / Discount Schemes on bulk project sales Transaction Fee (Commission) Buyers Club Advertising Campaign Management for Developers Related Industries Home Loans Utilities Home Services Others A dominant portal is the pre- requisite for entering into the transaction space Real Estate Advertising Business Supplementing Services Events / Expos / Awards Special Publications / Magazines Systems and Training Developer Online Advertising Pay per Campaign Pay per Product Agent Online Advertising Pay per Lead Pay per Listing Pay per Agent Subscription Pay per Agency Subscription Growing content and brand awareness increases SEO and reduces the consumer marketing costs
15 iproperty s Growth Strategy ecommerce (Transactions) Real Estate Advertising Business Bonus / Discount Schemes on bulk project sales Transaction Fee (Campaign) Project Marketing Buyers Club Advertising Campaign Management for Developers Supplementing Services Events / Expos / Awards Special Publications / Magazines Systems and Training Developer Online Advertising Pay per Campaign Pay per Product Agent Online Advertising Pay per Lead Pay per Listing Pay per Agent Subscription Pay per Agency Subscription Related Industries The Group Vision Think Property, Think iproperty Home Loans Utilities Home Services Others the largest real estate service provider in the Region A strong portal is the pre- requisite for entering into the transaction space Growing content and brand awareness increases SEO and reduces the consumer marketing costs
iproperty s Growth Strategy for the Advertising Business General Observations Strong growth of property advertising in our markets Accelerating migration of advertising spend from offline/smaller portals to market leading portals Pricing power for dominant portals Agents Maximising agent penetration to drive growth in property listings Increasing ARPA with continued focus on Depth advertising products on a per listing basis Automating engagement with Agents to improve lead management and drive ARPA growth Developers Continuing the migration of Property Developers to online products Enhance offering with rich media products such as iproperty.tv Improved lead management through new data management products Consumers Engaging consumers throughout the property lifecycle Effective use of database driven communication to drive leads to advertisers 16
iproperty s Growth Strategy for the ecommerce (Transactions) Business iproperty Buyers Club
18 Country Specifics
19 iproperty Malaysia significant growth in 2H13 MYR MYR 23,000,000 18,500,000 14,000,000 9,500,000 5,000,000 12,000,000 9,500,000 7,000,000 4,500,000 2,000,000 Malaysia Revenue 1H12 2H12 1H13 2H13 Malaysia EBITDA 1H12 2H12 1H13 2H13 Revenue growth half on half was 67% Significant impact on EBITDA: up 189% half on half EBITDA also up 53% in 2013 compared to prior year Registered paying agents approaching 10,000 Unique visitors to the website reach almost 1.6 m per month Consumer subscribers increased 35% Developer customers increased by 42%
20 iproperty Malaysia breakout year for agent business in 2013 Paying Agents 10,000 Agents 9,000 8,000 7,000 6,000 170 128 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 ARPA Market penetration now reaching > 90% Average Revenue Per Agent (ARPA) includes annual subscriptions and depth products; ARPA tripled from MYR 66 in Jan12 to MYR 179 in Mar14 Key driver of the business in 2014 driven by automation of the agent advertising products MYR 85 43 0 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13
21 iproperty Hong Kong approaches profitability in FY14 HKD HKD 15,000,000 11,250,000 7,500,000 3,750,000 0 0.0 (1,000,000.0) (2,000,000.0) (3,000,000.0) Hong Kong Revenue 1H12 2H12 1H13 2H13 Hong Kong EBITDA Hong Kong achieved strong revenue growth of 81% in 2013 Combined with prudent management of OPEX delivered an EBITDA improvement of 65% as HK targets profitability in FY14 Cemented leadership position in Hong Kong on all key metrics Approximately 900 paying agencies Unique visitors to the website reach almost 880K (4,000,000.0) 1H12 2H12 1H13 2H13
22 Indonesia making strong progress to cement No. 1 position IDR 6,000,000,000 4,500,000,000 3,000,000,000 1,500,000,000 0 Indonesia Revenue 1H12 2H12 1H13 2H13 Established clear leadership during 2013 Revenue up 24% in 2H13 half on half Registered paying agents up 42% to almost 8,000 (now 9,024 in Apr14) Unique visitors to the website peaked at over 1.2 m per month Consumer database subscribers increased 31% Developer customers increased by 66% during 2013
23 Singapore focused on stabilising operating expenses and driving greater productivity despite a challenging operating environment Revenue & Opex 6,000,000 SGD 4,500,000 3,000,000 1,500,000 0 50,000 37,500 2012 2013 Revenue per FTE Revenue Opex Revenue down marginally in local currency from prior year Emphasis on stabilising the cost base and increasing productivity Revenue per FTE increased almost 60% half on half Property listings grew to more than 80K SGD 25,000 12,500 0 1H12 2H12 1H13 2H13
24 Appendix
Malaysia Market Overview - updated Country Overview Real Estate Market Population (2013) 30.0m GDP per Capita US$17,775 Stability Index Moderate Internet Penetration (2013) 67% Internet Population 20.1m Total Advertising Spend US$4.1bn (2013) % Total Ad Spend Online 2-4% (2012) % Total Ad Spend in Print 34.0% (2013) Real Estate Advertising Market Agents 11,100 (e) Agencies/offices 1,392 (e) Developers 1,003 Developments 6,000 Commission Rate 2-3% Agent Sales Established Sales Online Real Estate Advertising Market 95% 85% Private Sales Comments Property not represented exclusively Low barriers to entry for sales people therefore low skill levels, no licences Emerging industry & growing use of technology New Sales Total Spend (2013) US$260m (e) Y on Y Change 5 6 % By Advertiser Agents 25% Developers 75% By Media Online 7% Other 10% Print83% (Mags & Papers) Total Online Spend US$14.0m (e) % Total Spend ~5 6% Y on Y Change Unknown Comments iproperty.com.my is the dominant market leader in Malaysia Profitable and growing Strong focus on depth products for agents Developers moving to annuity style of products i.e. subscription base plus additional campaign advertising Majority of revenues now developer segment and growing Source: Interviews with iproperty, fullhouse; CIA World Fact Book; Internet World Stats; Jane s Information Group; Malaysian Government Data; ZenithOptimedia, internet world stats. 25
Hong Kong Market Overview - updated Country Overview Population (2013) 7.2m GDP per Capita US$52,300 Stability Index Moderate Internet Penetration (2012) 75% Internet Population 5.3m Total Advertising Spend US$5.6bn (2013) % Total Ad Spend Online 7.0% (2012) % Total Ad Spend in Print 45.0% (2012) Real Estate Market Agents 35,966 Agencies/offices 3,017 85% (e) Developers 20 significant Agent Sales Private Sales Developments (2012) 30 Commission Rate 1% to 4% for new property 59% Established Sales New Sales Comments Agency business dominated by big 4 Midland + HK Property, Centaline + Ricacorp Generally volatile as property is almost traded like a commodity in the market Price often held up on low volume and often driven by mainland buyers Very competitive amongst agents with developers focused on the high end luxury Real Estate Advertising Market Online Real Estate Advertising Market Total Spend (2013) Y on Y Change By Advertiser Agents 20% Developers 80% US$341m (e) Unknown By Media Online 3% Other 28% TV 25% Print 45% (Mags & Papers) Total Online Spend <US$10m (e) % Total Spend ~3% Y on Y Change Unknown Comments Gohome.com.hk clear leader in Hong Kong Growing emphasis on depth products Top 4 Agency groups starting to use portals Developers now moving online 4 of the top 5 developers have started advertising on ghome.com.hk Increasing reach into mainland China developers targeting Hong Kong consumers (30% of traffic from mainland China) Source: Interviews with iproperty, fullhouse; CIA World Fact Book; Internet World Stats; HK Government Data; ZenithOptimedia, internet world stats. 26
Indonesia market summary - updated Country Overview Real Estate Market Population (2013) GDP per Capita Stability Index 251m US$5,100 Moderate Internet Penetration (2013) 30% Internet Population 74.6m Total Advertising Spend US$8.16bn (2012) % Total Ad Spend Online 2-4% (2012) % Total Ad Spend in Print 41.8% Agents 15,000 + (e) Agencies/offices 10 main groups Developers 2,200 (e) Developments 5,000+ Commission Rate 1%- 2% Agent Sales Established Sales 90% 85% Comments No sole agency for the sale of property Emerging middle class of 40 m ++ Dominated by foreign franchise groups, loose control of their agents Private Sales New Sales Real Estate Advertising Market Online Real Estate Advertising Market Total Spend (2013) US$112 m e) Y on Y Change Unknown By Advertiser Agents 27% Developers 73% By Media Online <2% Other 8% Print 90% (Mags & Papers) Total Online Spend <US$4m (e) % Total Spend ~2% Y on Y Change ~50% (e) Comments Rumah123.com is the market leader in Indonesia Subscription model for agents primary focus, little emphasis on depth products Agents now online and learn by doing Online advertising now regarded as meaningful part of marketing mix Developers starting to take up online advertising packages Source: Interviews with iproperty, fullhouse; CIA World Fact Book; Internet World Stats; Jane s Information Group; Indonesian Government Data; ZenithOptimedia, internet world stats. 27
Singapore market summary - updated Country Overview Real Estate Market Population (2012) 5.35m GDP per Capita US$61,400 Stability Index Moderate Internet Penetration (2012) 75% Internet Population 4.0m Total Advertising Spend US$4.3bn (2012) % Total Ad Spend Online 8-9%% % Total Ad Spend in Print 41.8% Agents 31,040 (e) Agencies/offices 1,479 Developers 100 (e) Developments 613 (e) Commission Rate 3% Average Agent Sales Established Sales 95% 90% Comments No sole agency for the sale of property 80% of population live in Government housing (HDB) Each agent is a small business and leverages an agency s brand Private Sales New Sales Real Estate Advertising Market Online Real Estate Advertising Market Total Spend (2012) Y on Y Change By Advertiser Agents 24% Developers 76% US$192m (e) Unknown By Media Online 7% Other 7% Print 86% (Mags & Papers) Total Online Spend <US$~12m (e) % Total Spend ~7% Y on Y Change ~50% (e) Comments Above expectations growth in Developer revenues Developers account for >75% of advertising Focus on listings volume to drive consumer engagement and depth revenue Singapore of key strategic importance for the transaction business Source: Interviews with iproperty, fullhouse; CIA World Fact Book; Internet World Stats; Jane s Information Group; Singapore Government Data; ZenithOptimedia, internet world stats. 28
Property advertising in the markets in which iproperty operates continues to grow with the migration to online platforms now accelerating Estimated Asian Property Marketing Outlays All Media USD (million) 2009 2010 2011 2012 2013 2014 2015 2016 Malaysia Agent 50 55 60 64 68 70 72 74 Developers 180 185 185 190 192 197 199 205 Total 230 240 245 254 260 267 271 279 Singapore Agent 40 44 45 47 49 50 52 53 Developers 140 145 145 145 149 152 155 156 Total 180 189 190 192 198 202 207 209 Hong Kong Agent 60 62 64 66 66 67 67 69 Developers 250 260 240 270 275 275 280 280 Total 310 322 304 336 341 342 347 349 Indonesia Agent 20 25 27 29 30 32 32 34 Developers Total 70 90 70 95 75 102 80 109 82 112 85 117 85 117 87 121 Total Agent 170 186 196 206 213 219 223 230 Developers 640 660 645 685 698 709 719 728 Total 810 846 841 891 911 928 942 958 *Source Data: Neilsen Research, Zenith Optimedia, Frost & Sullivan 29
30 Disclaimer The material contained in this presentation is non- specific and is a summary of the background to the company s activities. As this information is in a summary form it is not intended to be complete. Independent advice should be sort by Investors or potential Investors. The material does not take into account the investment objectives, financial situation or needs of a particular investor and therefore should not relied upon as investment advice to Investors or potential Investors.